Pacific Ethanol Inc. released first quarter 2018 financial results on May 8, reporting improved margins and an increase in total ethanol gallons sold. Net sales were also up for the quarter.
&ldquo;Production margins in the ethanol industry during the first quarter improved slightly from the fourth quarter of 2017 but remained compressed, as ethanol inventories reached an historic high in early March,&rdquo; said Neil Koehler, president and CEO of Pacific Ethanol. &ldquo;The fundamentals have improved since then due to strong exports, higher fuel demand, and moderating overall ethanol production. Ethanol inventories have fallen 9 percent over the last two months and are now 5 percent lower than last year at this time. We are optimistic the improved supply and demand balance will result in margin improvements as we enter the peak demand season.
&ldquo;Overall, the long-term fundamentals in our markets are getting stronger,&rdquo; he continued. &ldquo;Demand for our low carbon ethanol and high protein feed products is increasing both nationally and internationally. We continue to focus on product diversification and technology innovation to improve our operating efficiencies and financial performance.&rdquo;
During an investor call, Koehler said that during the current period of tight margins, the focus of Pacific Ethanol remains on implementing initiatives and investing in its assets to reduce costs, improve yields, lower carbon scores and build the company&rsquo;s long-term value. He said Pacific Ethanol is engaged in several plant-level capital projects, including those that will increase the output of high-value products, such as corn oil, corn gluten meal and yeast.
According to Koehler, the 3.5 MW cogeneration project at Pacific Ethanol&rsquo;s Stockton, California, facility has not yet achieved continued commercial operations. The two generating units have performed intermittently since February, he added. The system is expected to be fully operational at a target performance level by the beginning of the third quarter. Also at Stockton, Koehler said Airgas USA LLC has begun construction of a CO2 plant, which is expected to be online by the fourth quarter.
Koehler also said that the installation of a solar power system at the Madera, California, plant is progressing, with full electrical production expected to begin during the third quarter.
The Stockton plant continues to produce commercial quantities of cellulosic ethanol, Koehler added. However, he said delays in the U.S. EPA approval process for cellulosic pathway for the Madera and Magic Valley, Idaho, plants have caused these facilities to pause cellulosic ethanol production. The issue is expected to be resolved soon, he said.
Pacific Ethanol reported net sales of $400 million, up from $386.3 million during the same quarter of last year. Total gallons sold reached 232.7 million, up from 226.2 million during the first quarter of 2017. Total production gallons sold reached 140.8 million, up from 115 million. Gross profit was $3.4 million, compared to a gross loss of $5.8 million during the first quarter of last year. Operating loss was $6 million, compared to $11.2 million. Net loss available to common stockholders was $8.2 million, or 19 cents per share, compared to $12.9 million, or 31 cents per share. Adjusted EBITDA was $5.7 million, compared to negative $1.9 million during the first quarter of 2017.
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Pacific Ethanol Inc. released first quarter 2018 financial results on May 8, reporting improved margins and an increase in total ethanol gallons sold. Net sales were also up for the quarter.           



Pacific Ethanol reports improving margins

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